By TIOL News Service

AHMEDABAD, MAY 13, 2014: THE appellant had filed shipping bills for the months of February, March, April and May, 2008 for export of furnace oil. The said exports were allowed and the exports were effected . Subsequently, appellant made an application for conversion of shipping bills for this period from "free shipping bills" to "drawback shipping bills" and submitted the invoices shipping bills, Bills of Lading and bank realization certificate. The said application was rejected by the adjudicating authority on the ground that the provisions of Section 149 of Customs Act, 1962 do not envisage such a conversion. The adjudicating authority also relied upon the CBEC circular and on merit held that the goods which were exported having not been tested by the Customs to check the veracity of the declaration of the party on various export documents.

Aggrieved by such an order, the appellant is before the Tribunal.

The issue involved in this case is whether the appellant's application for conversion of free shipping bills into drawback shipping bills needs to be allowed or otherwise, when such application is made after the goods were exported.

The undisputed facts are that the documents relating to the exports i.e. invoice, shipping bills, Bills of lading and the bank realization certificate clearly indicate that the goods were exported and said goods were described in documents as "furnace oil". It is also undisputed that the appellant was exporting the said goods and subsequently the specific brand rate was fixed for the appellant's goods i.e. furnace oil.

On this factual background, the Tribunal had to consider the submissions made by both sides and find that the submissions made by the appellant needs to be accepted for more than one reason.

Firstly , Tribunal found that the documents like ARE-1, Bills of Lading, shipping bills specifically were signed by the Customs officers clearly indicate that the goods which were cleared for export was furnace oil. Tribunal agreed with the Departmental Representative's submissions that the no samples were drawn for the consignments which were exported to ascertain whether they were furnace oil or otherwise. This would not be a cause for non-conversion of the application of the appellant, for the simple reason that M/s Geochem laboratory, an independent analytical laboratory had analysed specific consignments which were exported; said reports indicate that the goods were "furnace oil". The mere perusal of the analytical certificate given by M/s Geochem Laboratory seems to co-relate the goods in the shipping bills wherein the description was given as "furnace oil".

Secondly , Tribunal found that CBEC vide Circular No.25 /2005/ Cus, has specifically accepted the representation of the Trade and the recommendations of the conference of the Chief Commissioners that the manufacturer/exporter's in-house quality control results can be relied upon if the said manufacturers/exporters are awarded with ISO 9000 series certificate. Non-production of appellant's in-house certificate, may not have any bearing on the outcome of the case in as much as there is no contest to the certificate issued by M/s Geochem laboratory who are one of the Government of India's recommended and authorized analytical laboratories. Tribunal did not find any reason why the benefit of said circular be not extended to cover the case of the appellant in seeking conversion of free shipping bills into drawback shipping bills, when there is a unimpeachable evidence of export of the furnace oil.

Thirdly , Tribunal found that the High Court of Mumbai in the case of Repro India Ltd - 2007-TIOL-795-HC-MUM-CX has specifically laid down in Para 8 which read that the intentions of the Government is not to export taxes but only to export the goods. In the case in hand, if the duty drawback is not allowed to the appellant, the appellant is perforce required to export the taxes, which gets included in the FOB value. This being not the intention, conversion of free shipping bills into drawback shipping bills needs to be allowed.

Tribunal also found strong force in the contentions raised by the Counsel that in the appellant's own case, this Bench on identical issue for the earlier period, has allowed such conversion.

Accordingly, Tribunal set aside the impugned order and directed the lower authorities to convert free shipping bills in this appeal to drawback shipping bills.

The impugned order is set aside and the appeal is allowed.

(See 2014-TIOL-754-CESTAT-AHM)